1. Field of the Invention
Embodiments of the present invention relate, in general, to energy services management and more particularly to systems and methodology for interfacing a plurality of energy service providers with an energy transmission/distribution grid.
2. Relevant Background
Electricity became commercially available when Thomas Edison opened the first generation plant in 1882 in New York City. At the end of the 19th and beginning of the 20th centuries, the growth of the electricity industry was as dramatic and revolutionary as the information technology age has been in the past three decades. Initially, the industry was characterized by numerous private generation facilities competing for customers in close proximity to the plant. By the end of the 1800s, increasingly larger plants with newer technology were able to produce electricity at lower costs per kilowatt-hour, exploiting a phenomenon known as economies of scale. U.S. Public Policy evolved to favor either the municipal ownership of electricity producers or the regulation by states of privately owned producers. The Public Utility Holding Company Act (PUHCA) of 1935 limited the operations of electric companies both geographically and in their financial structure. Along with the Federal Power Act of the same year, the PUHCA led to restructuring of the industry and the creation of a combined state and federal regulatory structure that still exists. By 1999 85% of all electricity production was devoted to utilities and the plants were owned and operated by municipalities. Of the 15% that remained, 51% resided in the manufacturing sector, 23% in services and the remaining 26% distributed among various enterprises. The utility electricity production capability largely favored investor-owned utilities (71%) with Federally owned (10%), publicly owned (13%) and cooperatives (5%) trailing substantially behind. Thus, investor-owned public utilities provided electric power for most Americans.
After energy prices increased by more than 500 percent in the 1970s, policymakers looked for anything that might provide consumers some relief. One result was the Public Utilities Regulatory Policy Act (PURPA) of 1978. The intention of the act was to encourage efficiency and innovation including the development of new independent energy producers. Next came the Energy Policy Act of 1992, which specifically created a class of wholesale power producers exempt from federal regulation. But the goal of a competitive electricity market that placed the consumer as a direct beneficiary remained elusive.
In the mid-1990s the Federal Energy Regulatory Commission (FERC) issued rules that promoted competition in wholesale power markets and required integrated utilities to make their transmission lines available to other producers for a reasonable fee. These policy changes laid a foundation for the deregulation of electricity generation.
The deregulation of the American Industry Infrastructure was primarily a product of the inflationary economic environment of the 1970s. For the most part it was not inspired by the businesses that were being regulated but, rather, came about when Congress was convinced that regulatory reform might reduce consumer prices. The changes began in the energy, transportation, and financial services industries and then spread to other parts of the economy. And while certain benefits with respect to deregulation have been realized (consider the effects for the deregulation of telecommunications), a dynamic and competitive electricity market upon which the consumer can participate has yet to be achieved.
Despite deregulation of some aspects of the electrical utility model, much of today's kilowatt energy delivery services remain regulated. FIG. 1 depicts a high level block diagram of the current utility model for the delivery of kilowatt hours to end consumers as would be known to one of reasonable skill in the relevant art. Energy consumers 100 gain metered 105 electricity through a combined electrical distribution 110 and transmission 120 system. A generation operator 130 uses resources such as coal and gas operated turbines, hydroelectric dams, wind farms and other means to generate electrical power. As one would expect there are a plurality of energy generation operators. At this stage the generated power is a commodity that is traded on the energy markets 145 between the generation operators (energy generation) 130, energy marketers, and retail energy suppliers. Likewise, transmission capacity is purchased and scheduled from transmission operators (energy transmission) 140 to transport electricity from source to delivery locations on the electric grid.
The transmission operator 140 manages and likely owns the power transmission system 120. The transmission system transports large amounts of energy from a primary generation facility to a plurality of smaller distribution systems 110 or distribution networks. Furthermore, a distribution network operator 155 at a distribution operation center 150 manages each distribution network. The energy consumer or end user thereafter interacts directly with the distribution network operator to gain access to the power grid. The distribution network operator, at a high level, is the distributor for energy produced by the generation operator 130 and transported to the distribution center by the transmission operator 140. A retail electricity supplier 165 typically sells power to the energy consumer and is responsible for billing and collections. The retail electricity supplier 165 may be the same entity as the distribution network operator or an unrelated company or companies depending on the state of electricity deregulation in different regions. In some instances the distribution operator uses automatic metering information 160 to validate the metered electricity delivered to the energy consumer 100. In addition to retail electricity sales from the distribution network operator 155, the energy consumer 100 also may access or gain electricity through one or more distributed energy resources 170 such as photovoltaic energy cells or windmills.
The energy market possesses similarities and distinctions from many consumer markets. For example the clothing industry possesses manufacturers that produce the clothes. The clothes are transported from the point of manufacturing to a distributor to ultimately arrive at a retail store and be purchased by the consumer. The energy market, however, is distinct by the non-duplicative and essential nature of the product. While energy can be transported via transmission lines, there is a physical limit to the distance power can be transmitted. Thus unlike much of manufacturing that occurs offshore and is transported worldwide to the market; energy must be generated regionally and transported to local distribution centers. Secondly the transmission lines that enable the transmission and distribution of electricity represent a significant capital investment and it would be inefficient (and unsightly) for multiple entities to maintain duplicative transmission and distribution systems. Thus the current system of transmission and distribution has turned into a regulated infrastructure that can be used by the various transmission 140 and distribution 155 operators to deliver power produced by the generators 130. While transmission 140 and distribution 150 operators are responsible for transporting electricity from generators to consumers, power marketers 145 facilitate the wholesale transactions between the major producers and retail suppliers. Within vertically integrated electric utilities generation, transmission, distribution, and retail sales functions may all be carried out by the same entity. In fully deregulated markets, these functions are carried out by different entities with multiple competitive companies existing for generation 130 and retail 165 while transmission 140 and distribution 150 functions remain regulated monopolies (i.e., common set of wires serve energy consumers, while the electricity delivered may come from different suppliers freely chosen by consumers). So in regions where electricity markets have been “unbundled,” competition can exist in power generation and retail sale, but not in transmission and distribution.
In a large deregulated metropolitan area the chosen distribution network operator 155 and transmission operator 140 supply electricity to meet the demands of its energy consumers 100. Consumers 100 in turn contract with one or more generation operators 130 for the actual power that is carried by the same set of wires. The type of generators may vary so as to meet peak demands and grid requirements. Prior to deregulation many of these functions were centrally organized by municipal or state electricity utilities or by investor owned utilities. The local utility would vertically manage consumer electricity delivery from generation to transmission to distribution to retail sale. In hopes of making the system more competitive, as previously described, some aspects (generation and retail sale) of the grid were deregulated but transmission and distribution remained under regulatory control. And unlike the telecommunication industry, the benefits of deregulation have not fully reached the energy consumer. Today the vast majority of energy consumers have but one choice for energy service. That choice and price of service remains largely regulated. Each consumer within a region serviced by the same distribution network operator (often the local utility) is provided with the same service at the same cost. Compared to the telecommunication industry in which today consumers are provided with a plurality of service plans with a wide range of costs and attributes, the deregulation of the electric industry is in a nascent stage.
For todays power grid to realize the promise of active grid management, distributed energy resources and end user services, the components of the grid described above must be interlinked and responsive to each other in a new way. Electricity consumers are not purchasing electricity for its own sake—they are purchasing electricity as one potential energy source (among many) to achieve other goals. Energy services refer to the solutions that service providers can supply to energy consumers that help them meet those goals. There also remains a need to provide energy consumers with a choice of energy service providers and energy services, where electricity delivery is only one of the possible services. The nature of these competitive energy services will vary depending on the needs of different consumers segments, the technologies available, policies and regulations, and the business model of service providers, all which are likely to change and evolve over time. At the same time, these consumer-facing energy services will depend on the transmission and distribution network to deliver electricity as and when needed. This results in the need for consumer-facing energy services and transmission and distribution operations to interact in dynamic ways. In addition, just as the consumer-facing energy services may require the transmission and distribution system to deliver electricity to power the services, transmission and distribution operations could also look to services from the consumer side for grid operations related resources. Therefore, there is a need for bidirectional dynamic interaction between energy services and grid operations. Which services gets delivered to whom and when will be dynamically determined during operations based on bilateral contracts, market mechanisms, or other means to clear such transactions. These and other deficiencies of the prior art are addressed by one or more embodiments of the present invention.